Piracy Crackdown Lifts Erie System

1/24/1999 7:00 PM Eastern

By: JOE ESTRELLA

After more than two years, Erie Cablevision is reaping thebenefits of a no-nonsense approach to a cable-theft problem run amok in the Pennsylvaniacommunity.

But despite an expanding list of end-users to be pursuedand the recent convictions of several high-profile black-box distributors, officials atthe 24,000-subscriber Time Warner Cable system are aware that there is still work to bedone.

"We believe that we're making inroads into theproblem," said Bill Wright, the system's vice president and general manager."But in a black-box environment, you can't be certain how many people arestealing from you."

If nothing else, however, the system's anti-piracyefforts have brought the scope of the problem into focus.

Through a series of initiatives -- including undercoverstings, electronic countermeasures, a consumer hot line and raids conducted by systems inother states -- Erie Cablevision has identified 528 local cable pirates.

"That's 4.2 percent of our subscriber base,"Wright said. "That's been very troubling to me. But that's also more than528 people in our sights now."

Wright began addressing the dilemma after arriving at thesystem in 1996. One of his first actions was to hire Douglas Hagmann, a local privateinvestigator, whom he educated, then "turned loose to search out the scope of theproblem."

Among the end-users whom Hagmann identified as stealingservice were local doctors, lawyers, judges and even City Hall, where cable traps had beenremoved in order to receive all of the system's premium and pay-per-view services.

After more than two years on the job, Hagmann now estimatesthat cable pirates may constitute 20 percent of all Erie cable viewers, or twice thenational average turned up in recent industry surveys.

"We're taking big business," Hagmann said.

Through a series of undercover stings conducted with thelocal office of the Federal Bureau of Investigation and the Pennsylvania State Police,Hagmann has helped to put several significant peddlers of bogus set-top boxes out ofbusiness.

Wright, meanwhile, has been pursuing hundreds of residentsin the community who use illegal devices to steal cable service. Among his first steps wasestablishing the system's first audit department, followed by the creation of a hotline for legitimate customers to call in and report potential cable thieves.

"We've done a lot to educate people," Wrightsaid, "and attitudes have changed significantly from the early days. Our legitimatecustomers are more supportive of what we're trying to do."

Wright agreed with a recent survey by the Anti-Theft CableTask Force, which found that theft of service remains prevalent because consumersmistakenly believe that operators will not pursue an end-user for fear of alienating thepublic.

It's an attitude that he plans on changing in hiscommunity.

"We're trying to emphasize that cable theft is acrime, that there are consequences to that crime and that we're going to have zerotolerance for it," Wright said. "We're not backing off. We're going tocontinue doing what we said we're going to do, and that includes filing civil suitsagainst individuals who we've identified."

Although the system's anti-theft efforts haven'tresulted in a discernible uptick in PPV units sold, they have padded the bottom line.

In 1997, for example, illegal customers converted to actualpaying subscribers generated another $48,000 in revenue. Last year, a new batch ofconverted cable pirates produced an extra $56,000, while the previous year's cropaccounted for another $65,000, not counting $60,000 collected in settlements.

"That has helped us to solidify and improve ourinternal procedures, and it has gone a long way toward demonstrating that we'reserious about controlling our signal," Wright said. "But it's been a long,time-consuming process."